Unit 2.

TRANSPORTATION and ASSIGNMENT METHODS

2.1 TRANSPORTATION METHOD

Transportation problems are concerned with selecting routes from the source of supply to the
distribution outlets. The objective is to minimize the cost of transportation.

This method will make use of repetitive procedures in going from one table to another until the
optimum table is reached; and since this is a minimization process, an optimum table is reached
when the improvement computations are all positive.

A transportation problem may be balanced or unbalanced.

• Balanced transportation problem has equal number of units of demand and supply.
.
• Unbalanced transportation problem has unequal number of units of demand and supply.

There are several transportation methods; however, the main method discussed in this unit is the
Stepping Stone Method:

Nature of the method:

1. Makes use of the unused or vacant cell as a starting point of destination to evaluate if the
solution can still be improved;

2. The general process is from a vacant cell, look for available three (3) occupied cells,
rectangular or zigzag in position to the point of destination; and

3. The movement is vertical then horizontal or horizontal then vertical.

Sample movement from a VACANT CELL to at least three (3) OCCUPIED CELLS:

zigzag in position rectangular in position

(start) 40 (start) 100

(stop)

10 20 100 50

30 80 90
(stop)

Note:
• In a rectangular position, from vacant as starting point, the landing (stop) point must be an
occupied cell and in level with the starting point.
• In the point of destination, you cannot stop then turn right or left, up or down, in a vacant
cell. You can just do it in and from an occupied cell.

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 This one is WRONG! THIS IS THE CORRECT ONE!

(start) 35 (start) 35
(stop)

25 40 25 40

29 50 29 50
(stop)

NOTES:

In order to solve transportation problems, you need to consider the following:

• The capacity of each of the supply points (or sources) – the quantity of goods that can be
produced at each factory or held at each warehouse. This is called the supply or stock.

• The amount required at each of the demand points – the quantity of goods that are
needed at each shop or by each customer. This is called the demand (or destination).

• The unit cost of transporting goods from the supply points to the demand points.
o The unit cost is the cost of transporting one item. If one item costs x pesos to
transport from A to B, then two items will cost 2x pesos to transport along that
route, and n items cost nx pesos.

LET US CONSIDER THE

FOLLOWING PROBLEM:

Example 3:

Jabboy Construction Supply Company has received a contract to supply gravel and sand
to three new road projects located at three different locations. Project A needs 459 truckloads,
Project B needs 519 while Project C needs 397 truckloads. The company has three warehouses
located in three different places. Warehouse 1 has 435 truckloads available, warehouse 2 has
497 and warehouse 3 has 443. The costs of transporting the materials from the warehouses to
the project locations are:
• from warehouse 1 to projects A, B, and C are P 3000, P 5000 and P 5000 per truckload,
respectively;
• from Warehouse 2 to projects A, B, and C are P 9000, P13000 and P 9000 per truckload,
respectively; and
• from warehouse to projects A, B, and C are P 5000, P 9000 and P 13000 per truckload,
respectively.
Design a plan of distribution that will minimize the cost of transportation.

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Solution:
A B C Supply
Prepare a table with rows and
columns.
W1 435
- The number of rows and columns
depends on how many supply points
you have, while the number of W2
497
columns depends on how many
demand points you also have. W3
443
Indicate the available supply and
demand in each respective row and
Demand 459 519 397 1375
column and its total demand and
supply. 1375

Write the entries in the table.

COST- at the upper right corner

of the cell.

OUTLETS – on top of the table.

WAREHOUSE (or the supply’s

location) – at the left side of
the table.

In the initial distribution, (Table 1),

• Start distributing the supply in W1 to project A.
• The demand for project A should be satisfied. If it’s not yet satisfied, get the remaining
needed demand from the next warehouse, W2.
• Then distribute the remaining supply in W2 to the next project, Project B. If the
demand in project B is not yet satisfied, proceed to W3 to get the remaining demand
for project B.
• Continue the process until the demands of the projects are satisfied. Remember, that
the sum of the demand and supply for the rows and columns must be always equal to
the quantity supplied and quantity demanded.

Note: The sum of the supply and demand units are equal; hence, we have a balanced table.

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 COMPUTE NOW THE COST OF TRANSPORTATION by multiplying the entries in the used cell
with the corresponding cost:
W1-A 435 x 3000 = 1,305,000 W3-B 46 x 9000 = 414,000
W2-A 24 x 9000 = 216,000 W3-C 397 x 13000= 5,161,000 Can this cost,
₱13,245,000,
W2-B 473 x 13000 = 6,149,000 total cost ------₱13,245,000 be decreased?

“Let us do the test, do the computation for improvement.”

To test if the cost can be minimized, make use of the vacant cells.

Vacant Cells: W1-B W1-C W2-C W3-A

Try to see what will happen, if a unit is transferred to W1-B, to W1-C, to W2-C and to W3-A. Take each of

Notes:
• The number of used cells must be equal to the sum of the number of rows and columns minus 1.
• So, in the distribution table of this example problem, we have:
Number of rows = 3 ; Number of columns= 3 ; 3 +3 = 6
The number of used cells will be: 6 -1 = 5
• If the number of used cells is less than the required one, the table is said to be degenerate.

the vacant cells and show the show the effects in its neighbouring cells if a unit is transferred to the
particular unused cell.

In the computation for improvement, the movement must be in a vertical and horizontal direction in
tracing the path of the route and the LANDING CELL must be an OCCUPIED CELL.

The operation involved in the computation is addition. The signs of the amounts from the starting cell to
the occupied cells must be alternating from positive, then negative, then positive again, and so on.

Computation for improvement for Table 1:

Vacant Cells: Route: Taking the COSTS OF OCCUPIED CELLS,

Rectangular or zigzag in position to each other:
W1-B 5000-13000+9000-3000 = -2000
W1-C 5000- 13000+9000-13000+9000-3000 = -6000
W2-C 9000-13000+9000-13000 = -8000
W3-A 5000-9000+13000-9000 = 0

Notice that the most negative result is the computation of W2-C which is -8000, this means that if a
unit is transferred to W2-C, we can minimize a cost of P 8,000 per truckload.

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ILLUSTRATIONS OF THE ROUTES FROM A VACANT TO THE OCCUPIED CELLS:

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To minimize a cost of P8,000, we have to transfer some units to cell W2-C. The problem is, from which

cells are we going to get the units to be transferred to cell W2-C?

C

W2 -13000 9000
473 497
9000 -3000 443
46 397

Notice the path of improvement, that in the computation there are two negative addends, -13000 and
-13000, these are the costs of W2-B and W3-C; whose entries are 473 and 397 respectively. Which of
these entries are we going to get to be given to W2-C? Choose the SMALLER ENTRY.
Thus, 397 units must be transferred to W2-C.
After the transfer, the affected entries are shown below.

Adjustment of entries in the occupied cells had been made in order to satisfy the demands under each
columns and the supplies along the rows. Notice again, that adding 397 to cell W2-C, means subtracting
it from Cell W2-B, but adding it to Cell W3-B.

Note: Upon adjustment of entries, do not transfer units to any vacant cell. You need to add or
subtract entries in the occupied cells only. Remember that you need to maintain the required
number of occupied cells.
So, the COMPLETE ENTRIES for table 2 is shown below:

COMPUTE AGAIN THE COST OF

NOTICE THE COST OF
TRANSPORTATION for TABLE 2
TRANSPORTATION:
Occupied Cells:
W1- A 435 x 3000 = 1,305,000
W2-A 24 x 9000 = 216,000 FROM TABLE 1, it was ₱13,245,000.
W2-B 76 x 13000= 988,000 In TABLE 2, it’s now ₱ 10, 069,000,
W2-C 397 x 9000 = 3,573,000 which shows a decrease in the cost.
W3-B 443 x 9000 = 3,987,000
₱ 10, 069,000 “can we decrease this cost from
Table 2?”

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 Then, try to see again if the distribution can still be improved, until we arrived at a computation for
improvement of the table with no more negative sum.

NOTE: If the computation for improvement has no more negative sum or negative amount
the table is said to be an OPTIMUM TABLE.

Improvement of Table 2:

Vacant Cells: Route: Taking the COSTS OF OCCUPIED CELLS,

rectangular or zigzag in position to each other:

W1-B 5000-13000+9000-3000 = -2000 There is still a

W1-C 5000-9000+9000-3000= 2000 negative sum,
which means,
W3-A 5000-9000+13000-9000= 0 that you need to
W3-C 13000-9000+13000-9000 = 8000 develop another
table.

ILLUSTRATIONS OF THE ROUTES IN THE IMPROVEMENT of TABLE 2

From the improvement computation of Table 2, there is still a negative sum which is -2000, the
computation result for vacant cell W1-B. This means that we need to transfer some units to cell W1-B.

-3000 5000 There are two negative

W1 435 addends, -3000 and -13000
9000 -13000 with supplies entries 435 and
W2 24 76
76, respectively.

Therefore, we can transfer the smaller number of units which is 76 to cell W1-B.

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 After the transfer, we have now the table:

TABLE 3 with complete entries:

Notice again THE COST OF

COMPUTE THE COST OF TRANSPORTATION:
TRANSPORTATION for TABLE 3
Occupied Cells:
FROM TABLE 2, it was ₱10, 069, 000
W1-A 359 x 3000 = 1,077,000
and now we have TABLE 3 showing a cost of
W1-B 76 x 5000 = 380,000
W2-A 100 x 9000 = 900,000 ₱ 9, 917,000. This shows again a decrease in
W2-C 397 x 9000 = 3,573,000 the cost.
W3-B 443 x 9000 = 3,987,000
₱ 9, 917,000 “Can we still decrease ₱ 9, 917,000?”

LET’S DO AGAIN THE COMPUTATION FOR IMPROVEMENT:

TABLE 3 with the vacant cells:

A B C SUPPLY

W1 3000 5000 5000 435

359 76
W2 9000 13000 9000 497
100 397
W3 5000 9000 13000 443
443
DEMAND 459 519 397 1375
1375

Route: Taking the COSTS OF OCCUPIED CELLS,

Vacant Cells Rectangular or zigzag in position to each other:

W1-C 5000-9000+9000-3000 = 2000 There is still a

W2-B 13000-5000+3000-9000 = 2000 negative sum,
W3-A 5000-3000+5000-9000 = -2000 which means, that
you need to develop
W3-C 13000-9000+9000-3000 = 10000 another table.

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The ROUTES of the VACANT CELLS of TABLE 3:

From the improvement computation of

Table 3, there is still a negative sum
which is -2000, the computation result -3000 5000
for vacant cell W3-A. This means that we W1
need to transfer some units to cell W3-A. 359 76
9000 13000
W2
There are two negative addends, 100
-3000 and -9000 whose supplies entries 5000 -9000
are 359 and 443 respectively. Therefore, W3
we can transfer the smaller number of 443
units which is 359 to cell W3-A.

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After the transfer, we have the following table:

TABLE 4 with complete entries:

COMPUTE THE COST OF Notice again THE COST OF

TRANSPORTATION for TABLE 4 TRANSPORTATION:
Occupied Cells:
W1-B 435 x 5000 = 2,175,000 FROM TABLE 3, it’s ₱9, 917,000 and now
W2-A 100 x 9000 = 900,000 we have TABLE 4 with a cost of
W2-C 397 x 9000 = 3,573,000 ₱9, 199,000. This shows again a decrease
W3-A 359 x 5000 = 1,795,000 in the cost.
W3-B 84 X 9000 = 756,000
₱9, 199,000
“Can we still decrease this cost from
Table 4?”

DOING AGAIN THE COMPUTATION for IMPROVEMENT:

Improvement of Table 4

Vacant Cells: Route: Taking the COSTS OF OCCUPIED CELLS,

rectangular or zigzag in position to each other:

W1-A 3000-5000+9000-5000 = 2000

W1-C 5000-9000+9000-5000 = 0 Notice that there
are no more
W2-B 13000-9000+5000-9000 = 0 negative results.
W3-C 13000-9000+9000-5000 = 0

Since the improvement computation has NO NEGATIVE RESULTS, Table 4 is the optimum table.

From Table 4, we can now formulate the decision.

The complete entries of Table 4 which is the optimum table:

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 Note: We can formulate the decision from the optimum table.

Hence, the decision:

DECISION:

Transport from:
Warehouse 1 to Project B ----- 435 truckloads
Warehouse 2 to Project A ----- 100 truckloads
Warehouse 2 to Project C ----- 397 truckloads
Warehouse 3 to Project A ----- 359 truckloads
Warehouse 3 to Project B----- 84 truckloads

The minimum cost of transportation: ₱9, 199,000

FOR UNBALANCED TRANSPORTATION PROBLEM:

• ADD A DUMMY SUPPLY or A DUMMY DEMAND, TO COME UP WITH A BALANCED

TRANSPORTATION TABLE; then
• APPLY THE SAME PRINCIPLE OR PROCESS IN SOLVING A BALANCED TRANSPORTATION
TABLE PROBLEM.

(CONTINUE SOLVING USING THE STEPPING STONE METHOD…)

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 TEST YOURSELF 2.1
SOLVE THE FOLLOWING PROBLEMS USING THE TRANSPORTATION MODELS.
Compare your answer to the solutions presented in the appendices.

1. A company producing a single product has three plants and three customers. The
shipping cost, requirements of the customers, and the capacities of the plants are given
below: Design a plan to minimize the cost of shipment.

Availabilities: 170, 190, 100 Cost Information: C1 C2 C3

Requirements: 150, 140, 170 P1 ₱150 ₱100 ₱150
P2 90 70 100
P3 40 80 80

2. A refined sugar wholesaler has received the following orders: from Mr. R, 800 sacks; from
Mr. N, 1600 sacks; and from Mr. C, 500 sacks. The available supply from his two
warehouses(W1 and W2) are 1500 sacks and 1400 sacks respectively. The cost of
transporting a sack of refined sugar from W1 to Mr. R, Mr. N, and Mr. C is ₱80, ₱50, and
₱40 respectively. From W2 to Mr. R, Mr. N, and Mr. C. is ₱40, ₱ 20, and ₱ 80 respectively.
Find the schedule of delivery that will give the minimum transportation cost.

2.2 ASSIGNMENT METHOD

This method is concerned with the allocation of jobs for each worker to come up with the
minimum cost. This is the standard procedure for solving the assignment problem on the basis of
the assignment table.

The assignment problem is the problem of assigning x workers to x jobs so that only one worker is
assigned to each. For every job there must be only one (1) worker assigned to it in such a way that
the cost of completing all the jobs are minimized.

2.2.1 STEPS in solving Assignment Problems:

1. Subtract the smallest cost from each entry in each row.

If each zero is already assigned in a one to one correspondence with the workers”, an
optimal solution is reached, otherwise proceed to step 2.
2. Subtract the smallest cost in each column.
If the zero entries is already assigned in a one to one correspondence with the “workers”,
an optimal solution is reached, otherwise proceed to step 3.
3. Cover the rows or columns with zero entries by horizontal or vertical lines, covering
first the row or column having the most number of zeros.
Subtract the smallest uncovered cost from each uncovered cost but add it to the entry
found at the intersection of the lines. If an assignment is already possible, an optimum
solution is obtained. If not, repeat Step 3.

An optimum table is obtained if the number of lines used in covering the rows and
columns is equal to the number of rows or the number of columns.

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 EXAMPLE 4.
The 5J company has three jobs to be done on three machines. Each job must be done on
one and only one machine. The cost for each machine is given below. Determine the job assignment
which will give a minimum cost.

Machines
1 2 3
Jobs
A 2,400 2,600 2,800

B 2,200 2,300 2,400

C 2,400 2,800 2,500

Reducing the given by deleting the two zeroes. (optional)

The “New table”: Table 1 Machines

1 2 3

Jobs A 24 26 28

B 22 23 24

C 24 28 25

1. Subtract the smallest cost from each entry in

each row, obtaining Table 2.

2. Subtract the smallest number from each entry

in each column, obtaining Table 3.

3. Cover the rows or columns with zero entries by

horizontal or vertical lines, covering first the
row or column with the most number of zeros.
• Start covering Column 1 (it has the most number
of zeroes); then
• Row B and Row C.

Since we have already three (3) lines that correspond to the number of rows and columns,
Table 3 is already the optimum table.

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 Example 5. A company has 4 machines available for assignment to 4 tasks. Any
machine can be assigned to any task, and each task requires processing by one
machine. The time in hours required to set up each machine for the processing of
each task is given in the table below:

Task 1 Task 2 Task 3 Task 4

Machine 1 13 4 7 6
Machine 2 1 11 5 4
Machine 3 6 7 3 8
Machine 4 1 3 5 9

The company wants to minimize the total set up time needed for the processing of all four (4)
tasks.

Notes:
Table 1 – the given table
Table 2 – result upon using Step 1
Table 3 – result upon using Step 2
• Lines were used to cover the rows and columns with zeros, since all rows and columns
have zeroes already, however it is not an optimum table because there were only 3
lines used in covering; this means, there’s a need to develop another table, Table 4.
• Create the next table, by subtracting the smallest uncovered cost from each uncovered
cost and add it to the entry found at the intersection of the lines. If an assignment is
already possible, an optimum solution is obtained.

Table 4 – the optimum table, the number of lines used in covering is already equal to the
number of rows or to the number of columns; there are four (4) rows, four (4) columns,
and four (4) lines.

DECISION: Therefore, Machine 1 will be assigned to set up Task 2 for 4 hrs;

Machine 2 to Task 4 for 6 hrs;
Machine 3 to task 3 for 8 hrs; and
Machine 4 to task 4 for 1 hr.

Minimum total set-up time : 4+6++8+1 = 19 hours.

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 TEST YOURSELF 2.2
SOLVE THE FOLLOWING PROBLEMS USING THE ASSIGNMENT METHOD.
Compare your answers to the solutions presented in the appendices.

1. A fastfood lane would like to hire the services of 4 part-time students to work a service crew.
Given the speed test, the following table indicates their performance per lane. Determine the
best allocation on each crew.

LANE
A B C D
Crew1 18 21 23 19
Crew2 21 20 17 23
Crew3 24 23 16 18
Crew4 20 18 21 22

2. A construction firm needs five carpenters to be assigned to five projects. The

following table gives the daily rate of each carpenter. Determine the best
allocation of each carpenter that will give the minimum cost.
PROJECTS
A B C D E
Carpenter 1 374 352 366 364 390
2 450 444 478 468 448
3 384 436 356 480 346
4 462 370 452 356 472
5 458 338 476 354 484

UNIT SUMMARY

Transportation Method:
• Used to solve problems concerning with minimizing the cost of transportation by
selecting routes from the source of supply to the distribution outlets.
• This method makes use of a repetitive procedures using a table, going from one table to
another until the optimum table is reached; and since this is a minimization process, an
optimum table is reached when the improvement computations are all positive.

Assignment Method:
• Used to solve problems concerning with the allocation of jobs for each worker to come
up with the minimum cost. This is the standard procedure for solving the assignment
problem on the basis of the assignment table.

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 TEST YOURSELF 2.1
1.
Table 1
C1 C2 C3
COST IMPROVEMENT:
150 100 150 (from the occupied cells) (from the vacant cells)
P1
150 20 150x150= 22,500 P2C1: 90-150+100-70=-30
90 70 100 20x100=2,000 P3C1: 40-150+100-
P2 120 70 120x70=8,400 70+100-80= - 60
40 80 80 70x100=7,000 P3C2: 80-70+100-80= 30
P3 100 100x80=8,000 P1C3: 150-100+70-100=20
47,900

Table 2

COST IMPROVEMENT:
C1 C2 C3 (from the occupied cells) (from the vacant cells)
150 100 150 50x150= 7,500 P2C1: 90-150+100-70=-30
P1
50 120 120x100=12,000 P3C2: 80-100+150-40=90
90 70 100 20x70=1,400 P1C3: 150-100+70-100=20
P2 170x100=17,000 P3C3: 80-100+70-
20 170
40 80 80 100x40=4,000 100+150-40=60
P3 41,900
100

Table 3

COST IMPROVEMENT:
C1 C2 C3 (from the occupied cells) (from the vacant cells)
150 100 150 350x150= 4,500 P1C3: 150-100+90-150=-10
P1 30 140 140x100=14,000 P2C2: 70-100+150-90=30
90 70 100 20x90=1,800 P3C2: 80-100+150-40=90
P2 20 20 170 170x100=17,000 P3C3: 80-100+90-40=30
40 80 80 100x40=4,000
P3 100 41,300

Table 4
C1 C2 C3 COST *IMPROVEMENT:
150 100 150 (from the occupied cells) (from the vacant cells)
P1
140 30 140x100= 14,000 P1C1: 150-90+100-150=10
90 70 100 30x150=4,500 P2C2: 70-100+150-100=20
P2 50 140 50x90=4,500 P3C2: 80-40+90-100+
40 80 80 140x100=14,000 150-100=80
P3 100 100x40=4,000 P3C3: 80-100+90-40=30
41,000

*NO MORE NEGATIVE SUMS, SO, TABLE 4 IS AN OPTIMUM TABLE.

DECISION:
From :
• plant 1, ship 140 units to Customer 2 and 30 units to Customer 3.

• Plant 2, ship 50 units to Customer 1, and 140 units to Customer 3.

• Plant 3, ship 100 units to Customer 1.

To incur a minimum Cost of ₱41,000.

2.

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Table 1
R N C COST IMPROVEMENT:
(from the occupied cells) (from the vacant cells)
80 50 40 800x80= 6,400 W2R: 40-80+50-20=-10
W1 800 700
W2
700x50=35,000 W1C: 40-80+20-50=-70
40 20 80 900x20=18,000
900 500 500x80=4,000
157,000

Table 2
R N C COST IMPROVEMENT:
80 50 40 (from the occupied cells) (from the vacant cells)
W1 800x80= 6,400 W2R: 40-80+50-20=-10
800 200 500 200x50=10,000 W2C: 80-40+50-20=70
W2 500x40=20,000
40 20 80
1400x20=28,000
1400 122,000

Table 3
R N C COST IMPROVEMENT:
80 50 40 (from the occupied cells) (from the vacant cells)
W1 1000x50= 50,000 W1R: 80-40+20-50=10
1000 500 500x40= 20,000 W2C: 80-40+50-20=70
W2
40 20 80 800x40=32,000
800 600x20=12,000
600 114,000

*NO MORE NEGATIVE SUMS, SO, TABLE 3 IS AN OPTIMUM TABLE.

DECISION:
FROM: Warehouse 1, deliver 1000 sacks to Mr. N and 500 sacks to Mr. C.
Warehouse 2, deliver 800 sacks to Mr. R and 600 sacks to Mr. N.

To incur a minimum cost of transportation which is ₱114,000.

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TEST YOURSELF 2.2

1.) TABLE 1 TABLE 2 TABLE 3

A B C D A B C D A B C D
18 21 23 19 0 3 5 1 0 3 5 0

21 20 17 23 4 3 0 6 4 3 0 5

24 23 16 18 8 7 0 2 8 7 0 1

20 18 21 22 2 0 3 4 2 0 3 3

*TABLE 4
*OPTIMUM TABLE
A B C D
DECISION:
0 3 6 0
Assign: Crew 1 to Lane A = 18
3 2 0 4 Crew 2 to lane C = 17
Crew 3 to Lane D = 18
7 6 0 0 Crew 4 to Lane B = 18
₱71.00 – minimum cost
2 0 4 3 per hour

2.)

TABLE 1
A B C D E
1 374 352 366 364 390
2 450 444 478 468 448
3 384 436 356 480 346
4 462 370 453 356 472
5 458 338 476 354 484

TABLE 2
A B C D E
22 0 14 12 38
2 6 0 34 24 4
3 38 90 10 134 0
4 106 14 96 0 116
5 120 0 138 16 146

TABLE 3 A B C D E
1 16 0 4 12 38
2 0 0 24 24 4
3 32 90 0 134 0
4 100 14 86 0 116
5 114 0 128 16 146

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 *TABLE 4

A B C D E
1 12 0 0 12 34
2 0 4 24 28 4
3 32 94 0 138 0
4 96 14 82 0 112
5 110 0 124 16 142

*OPTIMUM TABLE

DECISION:
ASSIGN: Carpenter 1 to Project C = 366
Carpenter 2 to Project A = 450
Carpenter 3 to Project E = 346
Carpenter 4 to Project D = 356
Carpenter 5 to Project B = 338
₱ 1,856 – the daily minimum Cost of Labor=

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